Question 1

The Ricardian model of comparative advantage lends support to the argument that

Accepted Answer

A)  trade tends to worsen the conditions of unskilled labor in rich countries. 
B)  trade tends to worsen the conditions of owners of capital in rich countries. 
C)  trade tends to worsen the conditions of workers in poor countries. 
D)  trade tends to worsen the conditions of workers in rich countries. 
E)  trade is mutually beneficial to the countries that engage in it. 
A)  trade tends to worsen the conditions of unskilled labor in rich countries. 
B)  trade tends to worsen the conditions of owners of capital in rich countries. 
C)  trade tends to worsen the conditions of workers in poor countries. 
D)  trade tends to worsen the conditions of workers in rich countries. 
E)  trade is mutually beneficial to the countries that engage in it.

Question 2

Describe the environmental Kuznets curve.

Accepted Answer

This curve shows the effect of increased

Question 3

-Refer to the above table.Suppose both governments offer their respective company a $10 million subsidy.

Accepted Answer

Both companies would enter the

Question 4

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

Accepted Answer

A)  is consistent with the Invisible Hand paradigm. 
B)  is consistent with the market failure approach. 
C)  is consistent with the Ricardian theory of comparative advantage. 
D)  is consistent with the scale economies approach to trade theory. 
E)  is consistent with the principles laid out by the WTO. 
A)  is consistent with the Invisible Hand paradigm. 
B)  is consistent with the market failure approach. 
C)  is consistent with the Ricardian theory of comparative advantage. 
D)  is consistent with the scale economies approach to trade theory. 
E)  is consistent with the principles laid out by the WTO.

Question 5

The invocation of beggar-thy-neighbor arguments with respect to industrial policies

Accepted Answer

A)  strengthens the argument for subsidies. 
B)  makes sense if the international Keynesian multipliers exceed unity. 
C)  applies only to rich countries most of whose trade partners are very poor countries. 
D)  weakens the argument for subsidies. 
E)  does not apply to rich countries who can influence relative world prices. 
A)  strengthens the argument for subsidies. 
B)  makes sense if the international Keynesian multipliers exceed unity. 
C)  applies only to rich countries most of whose trade partners are very poor countries. 
D)  weakens the argument for subsidies. 
E)  does not apply to rich countries who can influence relative world prices.

Question 6

Japan's protection of its semiconductor (RAM)producers is today seen as an object lesson in

Accepted Answer

A)  how strategic planning may backfire and cause a large waste of resources. 
B)  how externalities may be successfully exploited by protectionist policies. 
C)  how excess returns may be successfully exploited by protectionist policies. 
D)  how government intervention may create a meaningful comparative advantage. 
E)  how monopolies can outlast government intervention. 
A)  how strategic planning may backfire and cause a large waste of resources. 
B)  how externalities may be successfully exploited by protectionist policies. 
C)  how excess returns may be successfully exploited by protectionist policies. 
D)  how government intervention may create a meaningful comparative advantage. 
E)  how monopolies can outlast government intervention.

Question 7

In effect,the U.S.does subsidize high-tech firms by subsidizing R&D.This is done through

Accepted Answer

A)  the budget of the Department of Education. 
B)  systematic protection through the levying of tariffs. 
C)  systematic protection through the establishment of NTBs. 
D)  relatively accelerated "depreciation" of R&D investment in the Federal tax codes. 
E)  subsidies for high-tech firms. 
A)  the budget of the Department of Education. 
B)  systematic protection through the levying of tariffs. 
C)  systematic protection through the establishment of NTBs. 
D)  relatively accelerated "depreciation" of R&D investment in the Federal tax codes. 
E)  subsidies for high-tech firms.

Question 8

The Shipbreakers of Alang arouse the ire of Greenpeace because of

Accepted Answer

A)  India's non-repentant nuclear stance. 
B)  India's import-competing industrialization policies. 
C)  the difficulty of avoiding ship accidents between Greenpeace's sailboat and the reconstructed Container ships of Alang. 
D)  the large amount of pollution associated with the operations at Alang. 
E)  their competition with capital-intensive industries. 
A)  India's non-repentant nuclear stance. 
B)  India's import-competing industrialization policies. 
C)  the difficulty of avoiding ship accidents between Greenpeace's sailboat and the reconstructed Container ships of Alang. 
D)  the large amount of pollution associated with the operations at Alang. 
E)  their competition with capital-intensive industries.

Question 9

-Refer to the above table.Suppose both governments offer their respective company a subsidy of $4(million).

Accepted Answer

Only Airbus will produce since

Question 10

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher-Ohlin model,since

Accepted Answer

A)  shipbreaking is generally considered to be a capital-intensive operation and India, being a large country has much capital. 
B)  shipbreaking is a labor-intensive operation in India, and India has many workers since it is such a large country. 
C)  shipbreaking is a labor-intensive operation in India, and India's availability of capital per worker is less than that of its trade partners. 
D)  shipbreaking is a capital-intensive operation elsewhere in the world, and therefore represents a case of a factor intensity reversal. 
E)  India's climate lends itself to the work involved in shipbreaking. 
A)  shipbreaking is generally considered to be a capital-intensive operation and India, being a large country has much capital. 
B)  shipbreaking is a labor-intensive operation in India, and India has many workers since it is such a large country. 
C)  shipbreaking is a labor-intensive operation in India, and India's availability of capital per worker is less than that of its trade partners. 
D)  shipbreaking is a capital-intensive operation elsewhere in the world, and therefore represents a case of a factor intensity reversal. 
E)  India's climate lends itself to the work involved in shipbreaking.

Question 11

The Heckscher-Ohlin,factor-proportions model lends support to the argument that

Accepted Answer

A)  trade tends to worsen the conditions of unskilled labor in rich countries. 
B)  trade tends to worsen the conditions of owners of capital in rich countries. 
C)  trade tends to worsen the conditions of workers in poor countries. 
D)  trade tends to worsen the conditions of workers in rich countries. 
E)  trade tends to worsen the conditions of highly skilled workers in rich countries. 
A)  trade tends to worsen the conditions of unskilled labor in rich countries. 
B)  trade tends to worsen the conditions of owners of capital in rich countries. 
C)  trade tends to worsen the conditions of workers in poor countries. 
D)  trade tends to worsen the conditions of workers in rich countries. 
E)  trade tends to worsen the conditions of highly skilled workers in rich countries.

Question 12

Most developing countries oppose including labor standards in trade agreements because

Accepted Answer

A)  they believe this would involve a loss of their national sovereignty. 
B)  they believe this would limit their ability to export to rich markets. 
C)  they believe this would create an uneven playing field. 
D)  multinational corporations control them. 
E)  they do not want to improve wages for their workers. 
A)  they believe this would involve a loss of their national sovereignty. 
B)  they believe this would limit their ability to export to rich markets. 
C)  they believe this would create an uneven playing field. 
D)  multinational corporations control them. 
E)  they do not want to improve wages for their workers.

Question 13

The WTO seems at times to be interfering in domestic policy since

Accepted Answer

A)  the line between domestic policies and de factor protectionism is often fuzzy. 
B)  it is a supra-national organization with the power to overturn governments. 
C)  it determines which nations may trade what with whom. 
D)  it punishes naughty nations. 
E)  it exempts the U.S. and other powerful member nations from many of its edicts. 
A)  the line between domestic policies and de factor protectionism is often fuzzy. 
B)  it is a supra-national organization with the power to overturn governments. 
C)  it determines which nations may trade what with whom. 
D)  it punishes naughty nations. 
E)  it exempts the U.S. and other powerful member nations from many of its edicts.

Question 14

In the second half of the 1990s a rapidly growing movement focused on the harm caused by international trade to

Accepted Answer

A)  land owners in poor countries. 
B)  capital owners in rich industrialized countries. 
C)  land owners in rich industrialized countries. 
D)  production workers in both rich and poor countries. 
E)  terms of trade in developing countries. 
A)  land owners in poor countries. 
B)  capital owners in rich industrialized countries. 
C)  land owners in rich industrialized countries. 
D)  production workers in both rich and poor countries. 
E)  terms of trade in developing countries.

Question 15

It may be argued that Japan's explicit promotion of its microchip industry was an excellent example of successful industrial policy.What criteria would you apply to determine whether such a policy is or is not successful? Judging from your own stated criteria,was Japan's exercise successful? Why or why not? What information would a government require in order to increase the probability that its industrial policy would promote long term self-generated economic growth?

Accepted Answer

It is argued that Japan's subsidies to i

Question 16

Low wages and poor working conditions in many U.S.trade partners

Accepted Answer

A)  prove that the gains-from-trade arguments of the Ricardian model are false. 
B)  may be a fact of life, but economists don't care. 
C)  are facts emphasized by U.S. labor in its contract negotiations. 
D)  prove that the gains-from-trade arguments of the Ricardian model are true. 
E)  prove that international trade is exploitative. 
A)  prove that the gains-from-trade arguments of the Ricardian model are false. 
B)  may be a fact of life, but economists don't care. 
C)  are facts emphasized by U.S. labor in its contract negotiations. 
D)  prove that the gains-from-trade arguments of the Ricardian model are true. 
E)  prove that international trade is exploitative.

Question 17

-Refer to the above table.Suppose Airbus is set to produce the aircraft before Boeing.Which company will enter the market?

Accepted Answer

Airbus wil

Question 18

The best economic case one can make for an active industrial policy involves

Accepted Answer

A)  the national security argument. 
B)  the technological spillover argument. 
C)  the environment preservation argument. 
D)  the high value added argument. 
E)  raising the national income. 
A)  the national security argument. 
B)  the technological spillover argument. 
C)  the environment preservation argument. 
D)  the high value added argument. 
E)  raising the national income.

Question 19

The Shipbreakers of Alang utilize much labor and little capital,thereby supporting the applicability of the

Accepted Answer

A)  factor proportions explanation of the sources of comparative advantage. 
B)  specific factor theory of comparative advantage. 
C)  monopolistic competition theory of comparative advantage. 
D)  scale economies theory of comparative advantage. 
E)  basis of the non-dumping legislation. 
A)  factor proportions explanation of the sources of comparative advantage. 
B)  specific factor theory of comparative advantage. 
C)  monopolistic competition theory of comparative advantage. 
D)  scale economies theory of comparative advantage. 
E)  basis of the non-dumping legislation.

Question 20

It is still the conventional wisdom in the U.S.that compliance with NAFTA requirements is having a deleterious effect on U.S.highway safety standards,on U.S.pollution and other environmental standards,and on U.S.jobs.What facts would proponents of an expansion of NAFTA (e.g.,to include all of Central and South American countries)need to marshall in order to convince you?

Accepted Answer

The answer is subjective.Presu

The Ricardian model of comparative advantage lends support to the argument that

Describe the environmental Kuznets curve.

-Refer to the above table.Suppose both governments offer their respective company a $10 million subsidy.

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

The invocation of beggar-thy-neighbor arguments with respect to industrial policies

Japan's protection of its semiconductor (RAM)producers is today seen as an object lesson in

In effect,the U.S.does subsidize high-tech firms by subsidizing R&D.This is done through

The Shipbreakers of Alang arouse the ire of Greenpeace because of

-Refer to the above table.Suppose both governments offer their respective company a subsidy of $4(million).

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher-Ohlin model,since

The Heckscher-Ohlin,factor-proportions model lends support to the argument that

Most developing countries oppose including labor standards in trade agreements because

The WTO seems at times to be interfering in domestic policy since

In the second half of the 1990s a rapidly growing movement focused on the harm caused by international trade to

Low wages and poor working conditions in many U.S.trade partners

-Refer to the above table.Suppose Airbus is set to produce the aircraft before Boeing.Which company will enter the market?

The best economic case one can make for an active industrial policy involves

The Shipbreakers of Alang utilize much labor and little capital,thereby supporting the applicability of the

Introduction

National Income Accounting and the Balance of Payments

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: The Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,Outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Filters

Exam 12: Controversies in Trade Policy

The Ricardian model of comparative advantage lends support to the argument that

Describe the environmental Kuznets curve.

-Refer to the above table.Suppose both governments offer their respective company a $10 million subsidy.

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

The invocation of beggar-thy-neighbor arguments with respect to industrial policies

Japan's protection of its semiconductor (RAM)producers is today seen as an object lesson in

In effect,the U.S.does subsidize high-tech firms by subsidizing R&D.This is done through

The Shipbreakers of Alang arouse the ire of Greenpeace because of

-Refer to the above table.Suppose both governments offer their respective company a subsidy of $4(million).

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher-Ohlin model,since

The Heckscher-Ohlin,factor-proportions model lends support to the argument that

Most developing countries oppose including labor standards in trade agreements because

The WTO seems at times to be interfering in domestic policy since

In the second half of the 1990s a rapidly growing movement focused on the harm caused by international trade to

Low wages and poor working conditions in many U.S.trade partners

-Refer to the above table.Suppose Airbus is set to produce the aircraft before Boeing.Which company will enter the market?

The best economic case one can make for an active industrial policy involves

The Shipbreakers of Alang utilize much labor and little capital,thereby supporting the applicability of the

Introduction

National Income Accounting and the Balance of Payments

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: The Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,Outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Filters